Are you prepared to answer a question on Kisan Vikas Patra?

Kisan Vikas Patra: Is it a lucrative investment option? Are you prepared to answer a question on Kisan Vikas Patra?

‘Kisan Vikas Patra’, is a topic that features in the GK section of various Bank/SSC and other entrance exams. Hence, we thought of sharing some valuable insights into KVP scheme.

After reading the name ‘Kisan Vikas Patra’, you must wondering if it is exclusively launched for farmers? In layman terms, ‘Kisan Vikas Patra’ would refer to a scheme or a certificate for upliftment of farmer and rural community.

Kisan Vikas Patra is considered to be a safe investment scheme not only for farmer community but for every individual across the country. It aims to encourage investment among poor, rural and tribal families without access to banking and finance channels.

Background of Kisan Vikas Patra

Kisan Vikas Patra was first launched by the Government of India on April 1, 1988. A committee led by former Deputy Governor of RBI, Shyamala Gopinath recommended that KVP should be discontinued to avoid money laundering/black money. Hence, it was discontinued in 2011. To provide more investment schemes among citizens, Finance Minister Arun Jaitley re-launched the Kisan Vikas Patra (KVP) scheme on Nov 18, 2014.

Salient features of Kisan Vikas Patra

At present, Kisan Vikas Patra is sold through Post Offices across the country. Any citizen of India can purchase the KVP by filling a form and depositing the desired amount through cash or cheque.

Most of the target audience is either ‘Below Poverty Line (BPL)’ or ‘slightly above poverty line’, hence they do not fall under income tax bracket. Moreover, KVP’s are designed for low risk taking individuals looking for a hassle free safe investment option with high returns on their investment.

KVP Vs other investment options

The Kisan Vikas Patra (KVP) is one of the most popular saving schemes in the sub-urban and rural areas.

KVP Vs National Saving Certificate

KVP has a lock in period of 30 months while that of NSC is 60 or 120 months.

KVP is transferable to anyone, but this is not the case with NSC. It is transferable only once to a close relative.

KVP Vs Fixed Deposit

The interest rate of a Fixed Deposit (FD) in a bank for 8 years is similar to that of Kisan Vikas Patra. You might be aware that most of the banks offer 9% rate of interest which is more than 8.7% of KVP.

FD provides tax saving benefit, while KVP does not. But then the target audience of KVP is rural and farmer community.

KVP Vs Public Provident Fund

Maturity time of PPF is 15 years, but you can withdraw it partially after 7 years. Rate of interest of both KVP and PPF is 8.7%.

PPF offers tax saving benefit, whereas KVP return is taxable.

We are sharing with you some previous year questions and probable questions related to Kisan Vikas Patra (KVP).